Unions push for $50 boost to minimum wage

Unions say Australia's lowest paid workers are struggling to pay their bills and need a $50-a-week pay rise to cope with cost of living pressure.

The Australian Council of Trade Unions made a submission to the Fair Work Commission on Tuesday, arguing for a substantial boost to the minimum wage.

ACTU secretary Sally McManus argues the rise is necessary because the cost of living is going up while wages growth is not.

"People should not work full-time and struggle to pay for the basics of life. We need to restore a living wage," Ms McManus said.

She said many of the lowest-paid workers are in the hospitality and retail industries and will face a cut to their penalty rates on July 1.

Finance Minister Mathias Cormann said the commission needed to give careful consideration to the economic impact of any wage increase.

"If you increase the minimum wages further when we already have one of the highest minimum wages in the world, without taking steps to improve the profitability of business, you will drive more people into the unemployment queues," Senator Cormann told ABC TV.

Employer groups have also warned against an excessive increase, arguing now is not the time to take risks with the minimum wage.

Australian Industry Group's submission calls for a 1.8 per cent raise, the equivalent of $12.50 extra a week, while the ACTU's proposal amounts to a 7.2 per cent hike.

Ai Group chief executive Innes Willox said a dramatic increase would reduce the job security of low paid workers and lower employment opportunities for the unemployed and underemployed.

He said it was essential the Fair Work Commission opted for a more modest increase than last year.

"The 3.3 per cent minimum wage increase awarded by the panel last year was exceptionally high and out of step with economic factors," Mr Willox said.

Federal Labor will push for a higher minimum wage, though they are yet to decide on a figure.

The opposition's finance spokesman Jim Chalmers said the submission would not be made in conjunction with the ACTU, but backed the tone of the union push.

"They've got a series of very good arguments, as they generally do, about wage justice in this country," Mr Chalmers told ABC TV.

The ACTU's push is a major rise from last year's claim of $22 a week.

Once the commission has reached its decision, the changes will come into force on July 1.